Euribor at 4.1%: How many variable-rate mortgages are there?

Euribor at 4.1%: Who is paying €300 more and who isn't noticing?

With Euribor at 4.147% on June 23, 2023, the question is no longer whether the index is rising or falling, but who has to pay the price. Spain has two narratives about the same debt portfolio: one says almost everyone is on a fixed rate and this only affects a few; another claims that most outstanding mortgages are still tied to the index. The figures used by each side do not align. And that's where the numbers clash.

How many Spanish mortgages are still variable-rate?

The distribution changes depending on who does the calculation. One analysis estimates that around 60% of mortgages in force are fixed-rate and that a good portion of the 40% variable are already significantly paid down.

Another analysis, attributed by a forum user to INE (National Statistics Institute) statistics, reaches a different conclusion: between 2016 and 2020, approximately 65% were signed at a variable rate and 35% at a fixed rate; before 2015, fixed rates accounted for less than 10%. Another user adds that, since the average mortgage is signed for 25 years, someone who bought in 2009 might still have a decade left paying a variable rate.

Another user echoes a link suggesting that 30% of mortgages are at serious risk of default; this is where the figure of over a million households comes from. That calculation turns a casual discussion into a problem of delinquency.

The specific case: €300 more per monthly payment

The examples all point in the same direction. A variable-rate mortgage signed in 2007 for 35 years, with €89,000 outstanding, has seen its payment increase by almost €300. Another, with €45,000 of outstanding debt, has been revised €25 higher. And a third case, mortgaged at a variable rate in 2017, has paid off €130,000 by giving up trips and luxuries; with €35,000 remaining, the increase is only €20: it implies that the Euribor makes no difference to them.

The difference is not luck. It's how much capital is still outstanding and in what year it was signed. For some, the revision is an annoyance; for others, the final blow.

Why aren't deposit rates rising as fast as Euribor?

Among the offers mentioned in the thread are 2.80% for 12 months for existing deposits and 3.30% for new money, and in some cases, they are not even listed online: you have to go to the branch. A neobank is also mentioned with a 3.30% for one year or even 4% for six months for new customers.

For another user, the contrast with inflation is the problem. This user calculates that in the last two years, the real price increase has far exceeded 15%, while deposits have yielded at most 2% or 3%. They conclude that the 4.1% Euribor does not compensate for this, and that the saver bears the cost.

The problem for those who come later

Several participants agree that it's worse for those who haven't bought yet. With rents in many areas matching or exceeding a mortgage payment, saving for a down payment has become an impossible mission. And those in the process risk losing their savings if financing falls through. Either prices drop or no one gets a mortgage, summarizes the argument.

Regarding public aid, there is division. One participant recalls that the €200 for inflation reached almost no one. Another warns that if unemployment rises, housing prices will eventually fall, and that facilities for mortgage holders are ultimately paid for by taxpayers as a whole. In one cited case, the code of good practice allows changing a Euribor plus 0.75% for a Euribor minus 0.1%, in exchange for paying only interest for five years.

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With Euribor at 4.1%, a user observes that the terraces are still full. Perhaps most people are on fixed rates, as one participant claims. Or perhaps a million mortgages are on the verge of default, according to another. These are two narratives that do not align.